Story:– Bella Casa Fashion is a branded play on the domestic home furnishings and garment businesPromoter family has only this business. 2 generations involved in the biz – handling different functions. Next gen is aggressive, especially Saurav Gupta (NIFT Gold Medalist – joined biz in 2004).2 factories with 150-160 cr. capacity slated to go up to 200 cr in FY18.
Apparels business:- Focused on women’s Indian wear,dedicated plant spread over 1 lac sq ft. It’s only B2b business. top customers – reliance trends, lifestyle, ABRFL (Pantaloons), Max, Shoppers Stop. Reliance is the largest customer with 40% share of revenue in this biz. Current capacity 60cr per annum.Capacity set to increase to 100cr in july 17. Reliance has underwritten (assured offtake) full increased capacity. This is against bulk discounts. Gross margin stands at 30%.
Home Furnishing:-Into branded bed sheets and quilts.Dedicated plant spread of .5 lac sq feet capable of delivering 100cr revenue. Fully automated quilt plant with 1000 quilts/day capacity. 75% branded biz under own brand Bella Casa. Balance 25% sells to sleepwell and Kurlon. 25% blended GM. Branded 27%, non branded 18%. Over time the share of branded will keep going up. They focus on brand visibility through instore mktg in Hypermarket/cash n carry/dept store channel ( spend up to 4-5% of branded HF revenue).TV sales on homeshop18 account for a lot of sales.Celebrity endorsements under discussion. Ecomm – they sell to flipkart etc on outright basis,so entire cost/efforts to sell is borne by the website. They also export ..mainly to Middle East (landmark group).5 cr exports. Exports will grow,But real focus will be on domestic market as they see much bigger opportunity here
Other points to note:-Raw material cotton is a pass through. Expect cotton prices to be subdued this year. Capex of 9 cr on expanding apparels capacity (3cr for capex and 6cr for w/c) will be incurred shortly.Can do PAT 6 cr. in FY18.Projected to do 12-13 cr pat in FY20 with 200 cr+ sales. It will move to mainboard in Dec’17. Current roce 17%.